AML and counter-terrorist financing training materials—post-training ‘red flag’ identification exercise
AML and counter-terrorist financing training materials—post-training ‘red flag’ identification exercise

The following Practice Compliance precedent provides comprehensive and up to date legal information covering:

  • AML and counter-terrorist financing training materials—post-training ‘red flag’ identification exercise

Scenario A: Politically exposed person

You have been approached by a new client with instructions to assist in the purchase of a football club. The client is a high net worth individual who made his fortune in the mining industry in an emerging market. He then moved into politics before choosing to pursue some business interests.

In accordance with the firm’s policy, enhanced due diligence (EDD) has been carried out and his politically exposed person (PEP) status was highlighted. The issue of source of funds was raised and the client responded to say that the acquisition was to be funded out of the proceeds of sale of one of his former mining businesses.

During the course of the matter you have found the client to be a difficult character who constantly tries to change his instructions with no logical explanation.

It has also been brought to your attention by a junior lawyer that in a recent news article the client had been accused of bribery in obtaining the mining concessions on which his fortune was built. Further, during his time in politics, the client was implicated in an expenses scandal.

You raised the issues with the client who explained that the charges were politically motivated and had been invented by an opponent to discredit him.

Step 1: Identify at least three red flags that are contained in this scenario (and

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